help me understand the help to buy schemes please

AllyS

Our house is too small, 5 living in a 2 bed house. A house has become available at the bottom of our road which is 4 bed -perfect!! Except I think ( we still need to see a financial advisor) we are about £20,000 short! Can we use the government help to buy scheme? I know we can for new builds but there are no 4 beds left and the 3 beds have smaller rooms so we can't divide them like we have done in this house.

Any help much appreciated.

amnblog

We have two very short videos on our website explaining both the Help to Buy Guarantee Scheme and the Equity Scheme.

PM me if you would like a link.

ACG

There are 2 schemes. 1 for new builds, the other for non new builds.

The scheme for non new builds is a 5% deposit and a 95% mortgage. You will see no difference between applying for that and a normal mortgage apart from one extra form to sign.

One thing to be aware of is that help to buy will not enable you to borrow more, you still have to pass affordability tests and they tend t be stricter using 95% mortgages. The only thing they do allow is for you to put down a small deposit.

So if your income/expenditure will only support a £100k mortgage, help to buy will not enable you to get £120k.

AllyS

We have about £50,000 equity in our house. The 4bed house is £199,999 and we are allowed to borrow £120,000 based on our re mortgage 18 months ago. So will the help to buy scheme not help at all? It's just when we looked at the new houses and they were trying the hard sell they suggested the help to buy to top it up.
Thanks for all the help so far x

kingstreet

HTB is not designed to produce a bigger and less affordable mortgage.

I suggest you speak to a broker to establish if there are lenders who will lend you more than what you were told was maximum last time round.

ACG

On new builds there is an equity loan version where you take a mortgage for 75% a 5% deposit and a loan for the remainder - but it still has to fit affordability.

I would suggest speaking to a broker also. Some lenders can be more lenient on how much they will lend than others but as it stands I dont think you need the help to buy scheme at all so I would pretty much discount that.

AllyS

Okay thank for all the replies. We have a appointment on Wednesday.
Not trying to make our mortgage repayments less, just trying to afford a suitable sized property.